TIDMHDD
RNS Number : 3836A
Hardide PLC
21 January 2020
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE
UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH
AFRICA, THE REPUBLIC OF IRELAND OR ANY OTHER JURISDICTION IN WHICH
SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND
SHALL NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION
OF AN OFFER TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY NEW
ORDINARY SHARES OF HARDIDE PLC IN ANY JURISDICTION IN WHICH ANY
SUCH OFFER, ISSUE OR SOLICITATION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
21 January 2020
Hardide plc
("Hardide", the "Group" or the "Company")
Placing to raise GBP2.5 million
Board Change
Hardide plc (AIM: HDD), the developer and provider of advanced
surface coating technology, is pleased to announce that it has
conditionally raised GBP2.5 million before expenses by way of a
placing (the "Placing"). The Placing will be satisfied through the
issue of 3,968,254 new ordinary shares of 4.0 pence each in the
Company ("Ordinary Shares") (the "Placing Shares") at a price of
63.0 pence per share (the "Placing Price").
The Placing follows significant demand from new and existing
investors and is an opportunity to welcome new investors to the
register. The Board is pleased to announce that the Placing has
been significantly oversubscribed and the Placing Price of 63.0
pence represents a premium of 1.6 per cent. to the closing
mid-market price on 20 January 2020.
With these new funds the Company will acquire replacement and
additional modern equipment to a value of approximately GBP1.5
million in connection with the move to new premises in Bicester
during 2020. This will enable the Company to achieve greater
operational efficiency and environmental performance. Plans include
upgrading the existing three coating reactors to the latest
technical specifications along with new pre-treatment and component
cleaning equipment and a new development reactor. In addition to
the capital investment, the new funds will allow the Company to
meet the additional fit-out costs of approximately GBP350,000 that
are associated with the new site. A further GBP500,000 of
additional capex requirement has been identified by the Company in
order to enhance the technical, quality control and analytical
facilities, as well as for equipment to improve health and safety
and additional future proofing of the Martinsville and Bicester
sites.
As set out in the Company's annual results that were announced
on 9 December 2019, the move to the new facility in Bicester
remains on track, and will result in improvements to capacity,
capability and environmental performance.
A major factor in the decision to buy new equipment is the need
to keep the processing capability for Airbus components at the
present UK site during the move to the new Longlands Road site.
This is because Airbus approval is specific to equipment and its
location. Accordingly, the new site will require its own audit and
approval, which is now unlikely to be finalised by Airbus until
early 2021. There will be minimal operating costs for the residual
operations at the current Wedgwood Road site until then.
The Placing will also enable the Company to strengthen its
balance sheet, thereby providing additional reassurance to large
customers intending to enter into long-term supply agreements with
Hardide.
The Company will continue to explore the potential for asset
finance.
The Placing is taking place pursuant to existing authorities
established at the Company's last Annual General Meeting on 4 March
2019.
Further information on the Placing, including its
conditionality, is set out below.
Board change
The Company also announces that Hardide's Finance Director,
Peter Davenport, has notified his intention to step down to pursue
a career in education. The Board has identified a talented
successor and is in the process of finalising contract terms. Peter
will remain with the Company as Finance Director until his
successor is appointed and for a short period thereafter to ensure
a smooth handover. A more detailed announcement outlining the
change will be made in due course.
Director Dealing
Yuri Zhuk, Technical Director, intends to sell 208,775 Ordinary
Shares as soon as possible following this announcement, at no less
than the Placing Price. Dr. Zhuk is selling these shares to fund a
property purchase. A further announcement will be made in due
course once the sale has occurred.
Details of the Placing
The Placing Shares, when issued, will represent approximately
7.47 per cent. of the Company's then issued share capital. The
Placing Price of 63.0 pence per Placing Share represents a premium
of approximately 1.6 per cent. to the closing mid-market price of
62.0 pence per Ordinary Share on 20 January 2020.
The Placing Shares, when issued, will be fully paid and rank
pari passu in all respects with the existing Ordinary Shares,
including the right to receive all dividends and other
distributions declared, made or paid in respect of such Ordinary
Shares after the date of issue.
The Placing Shares will be issued under the Company's existing
authorities established at the Company's last Annual General
Meeting on 4 March 2019, subject to customary conditions, including
admission to trading on AIM ("Admission") of the relevant Placing
Shares becoming effective. Settlement for the Placing Shares and
Admission is expected to take place at 8.00 a.m. on 24 January
2020. The Company has received advance assurance from HM Revenue
& Customs that the Placing Shares will rank as 'eligible
shares' for the purposes of EIS and will be capable of being a
'qualifying holding' for the purposes of investment by VCTs.
The Placing is conditional, inter alia, upon:
a. the Placing Agreement, described below, becoming
unconditional in all respects (save for Admission) and not having
been terminated;
b. the Company having allotted, subject only to Admission, the
Placing Shares in accordance with the Placing Agreement; and
c. Admission of the Placing Shares becoming effective at or
before 8.00 a.m. on 24 January 2020 or such later time as finnCap
and Allenby Capital may agree with the Company (being not later
than 8.00 a.m. on 7 February 2020).
The Placing Agreement
i. Pursuant to the terms of a placing agreement between the
Company and its joint brokers, finnCap and Allenby Capital
("Placing Agreement"), finnCap and Allenby Capital have agreed to
use their respective reasonable endeavours to procure placees for
the Placing Shares at the Placing Price.
ii. The Placing Agreement contains customary warranties from the
Company in favour of finnCap and Allenby Capital in relation to,
inter alia, certain matters relating to the Company and its
business. In addition, the Company has agreed to indemnify finnCap
and Allenby Capital in customary terms in relation to certain
liabilities that may be incurred in respect of the Placing.
iii. Each of finnCap and Allenby Capital has the right to
terminate the Placing Agreement in certain circumstances prior to
Admission, in particular, in the event of a material breach of the
warranties given to finnCap and Allenby Capital by the Company in
the Placing Agreement, the failure of the Company to comply with
any of its obligations under the Placing Agreement or the
occurrence of an adverse change in (amongst other things) national
or international financial or political conditions (which in the
opinion of finnCap and Allenby Capital will or is likely to be
prejudicial to the Company or to the Placing or Admission).
Application for Admission and Total Voting Rights
Application has been made to the London Stock Exchange for the
3,968,254 Placing Shares to be admitted to trading on AIM and it is
anticipated that trading in the Placing Shares will commence on AIM
at 8.00 a.m. on 24 January 2020.
On Admission, the Company's issued share capital will comprise
53,113,946 Ordinary Shares with one voting right each, with no
Ordinary Shares held in treasury. Therefore, the total number of
Ordinary Shares and voting rights in the Company on Admission will
be 53,113,946. From Admission this figure may be used by
shareholders in the Company as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change to their interest in, the share capital of
the Company under the FCA's Disclosure Guidance and Transparency
Rules.
Related Party Transactions
Canaccord Genuity Ltd, Marlborough Nano-Cap Growth Fund and
Canaccord Genuity Wealth Ltd ("Canaccord") have agreed to subscribe
for, in aggregate, 1,017,615 Placing Shares pursuant to the
Placing. Canaccord is a related party of the Company for the
purposes of the AIM Rules for Companies by virtue of its status as
a shareholder holding 10% or more of the existing Ordinary
Shares.
The directors of the Company (the "Directors") consider, having
consulted with the Company's nominated adviser, finnCap, that the
terms upon which Canaccord has participated in the Placing are fair
and reasonable insofar as the Company's shareholders are
concerned.
Robert Goddard, Chairman of Hardide, commented: "I am delighted
that we have been supported by new and existing shareholders to
provide the Company with additional capital to support our growth
strategy. The new money raised will enable the Company to promote
the continuing growth of Hardide and strengthen its balance sheet.
The funds will mainly be employed at the new UK site which will see
improvements to production capacity, capability and environmental
performance to deal with the increased demand for our products.
"I would also like to take this opportunity to thank Peter
Davenport for all his help and support over the years and we wish
him well in his new teaching profession.
"As previously reported, the year has started well and we look
forward to the year ahead with confidence."
Enquiries:
Hardide plc Tel: +44 (0) 1869
Robert Goddard, Non-Executive Chairman 353830
Philip Kirkham, CEO
Jackie Robinson, Communications Manager
finnCap - Nominated Adviser and Joint Broker Tel: +44 (0) 20 7220
Henrik Persson / Matthew Radley 0500
Allenby Capital - Joint Broker Tel: +44 (0)20 3328
Jeremy Porter / James Hornigold 5656
IFC Advisory - Financial PR and Investor Tel: +44 (0) 20 3934
Relations 6630
Graham Herring / Tim Metcalfe / Florence
Chandler
Notes to editors:
Hardide develops, manufactures and applies advanced technology
tungsten carbide/tungsten metal matrix coatings to a wide range of
engineering components. Its patented technology is unique in
combining, in one material, a mix of toughness and resistance to
abrasion, erosion and corrosion; together with the ability to coat
accurately interior surfaces and complex geometries. The material
is proven to offer dramatic improvements in component life,
particularly when applied to components that operate in very
aggressive environments. This results in cost savings through
reduced downtime and increased operational efficiency. Customers
include leading companies operating in oil and gas exploration and
production, valve and pump manufacturing, precision engineering and
aerospace industries.
www.hardide.com
IMPORTANT NOTICES
The information communicated in this Announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
This Announcement should be read in its entirety. In particular,
you should read and understand the information provided in this
"Important Notices" section of this Announcement.
This Announcement does not constitute a prospectus for the
purposes of the Prospectus Rules of the FCA, nor does it comprise
an admission document prepared in accordance with the AIM Rules.
Accordingly, this Announcement has not been approved by or filed
with the FCA.
finnCap, which is authorised and regulated in the United Kingdom
by the FCA, is acting as nominated adviser and joint broker to the
Company for the purposes of the AIM Rules for Companies exclusively
for the Company and no one else and will not be responsible to any
other person for providing protections afforded to their customers
nor for providing advice in relation to the contents of this
Announcement. No representation, warranty, express or implied, is
made by finnCap for the accuracy of any information or opinions
contained in this Announcement or the omission of any material
information, nor has finnCap authorised the contents of this
Announcement for any purpose and no liability whatsoever is
accepted by finnCap. finnCap expressly disclaims all and any
responsibility or liability whether arising in tort, contract or
otherwise which they might otherwise have in respect of this
Announcement.
Allenby Capital, which is authorised and regulated by the FCA in
the United Kingdom, is acting as joint broker to the Company for
the purposes of the AIM Rules for Companies in connection with the
Placing and Admission. Allenby Capital will not be responsible to
any person other than the Company for providing the protections
afforded to clients of Allenby Capital or for providing advice to
any other person in connection with the Placing or any acquisition
of shares in the Company. Allenby Capital is not making any
representation or warranty, express or implied, as to the contents
of this Announcement and has not authorised the contents of, or any
part of, this Announcement, and no liability whatsoever is accepted
by Allenby Capital for the accuracy of any information or opinions
contained in this Announcement or for the omission of any material
information.
Forward-Looking Statements
This Announcement contains forward-looking statements. These
statements relate to the Group's future prospects, developments and
business strategies. Forward-looking statements are identified by
their use of terms and phrases such as "potential", "estimate",
"expect", "may", "will" or the negative of such terms and phrases,
variations or comparable expressions, including references to
assumptions. The forward-looking statements in this Announcement
are based on current expectations and are subject to risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by those statements. These
forward-looking statements speak only as at the date of this
Announcement. No statement in this Announcement is intended to
constitute a profit forecast or profit estimate for any period.
Neither the Directors nor the Company undertake any obligation to
update forward-looking statements other than as required by the AIM
Rules or by the rules of any other securities regulatory authority,
whether as a result of new information, future events or
otherwise.
Information to Distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("MiFID II"); (b) Articles 9 and
10 of Commission Delegated Directive (EU) 2017/593 supplementing
MiFID II; and (c) local implementing measures (together, the
"Product Governance Requirements"), and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the Product Governance
Requirements) may otherwise have with respect thereto, the Placing
Shares have been subject to a product approval process, which has
determined that the Placing Shares are: (i) compatible with an end
target market of retail investors and investors who meet the
criteria of professional clients and eligible counterparties, each
as defined in MiFID II; and (ii) eligible for distribution through
all distribution channels as are permitted by MiFID II (the "Target
Market Assessment"). Notwithstanding the Target Market Assessment,
investors should note that: the price of the Placing Shares may
decline and investors could lose all or part of their investment;
Placing Shares offer no guaranteed income and no capital
protection; and an investment in Placing Shares is compatible only
with investors who do not need a guaranteed income or capital
protection, who (either alone or in conjunction with an appropriate
financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources
to be able to bear any losses that may result therefrom. The Target
Market Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation
to the Placing. Furthermore, it is noted that, notwithstanding the
Target Market Assessment, only investors who have met the criteria
of professional clients and eligible counterparties have been
procured. For the avoidance of doubt, the Target Market Assessment
does not constitute: (a) an assessment of suitability or
appropriateness for the purposes of MiFID II; or (b) a
recommendation to any investor or group of investors to invest in,
or purchase, or take any other action whatsoever with respect to
Placing Shares.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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January 21, 2020 02:00 ET (07:00 GMT)
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